Midland landlords have been hit with a wake-up call following Travelodge’s corporate voluntary arrangement (CVA) according to a specialist in the city.
The budget hotel operator is seeking to offload more than a dozen of its hotels in Birmingham and the West Midlands to address its £700 million debt pile.
The 14 West Midlands’ hotels are among 49 across the country, and 30 per cent of Travelodge’s 505-strong portfolio, earmarked for transfer and under the CVA agreed between the budget chain’s landlords and creditors, and Travelodge investors GoldenTree Asset Management, Avenue Capital Group and Goldman Sachs, a six-month rent reduction of 55 per cent has also been negotiated on these properties.
Jonathan Wren, a director and head of the hotels team at Colliers International in Birmingham, said the move was a wake-up call for the property industry.
He added: “During the recession Travelodge, alongside Premier Inn, have been the go-to names for developers looking to attract a hotel to their site.
“These two operators have had massive expansion programmes and boasted strong covenants. They are also the only significant names that run on a leasehold model, typically taking 25 years.